Three Non-Negotiable Founder Traits

It is getting challenging to identify great companies in the increasingly capitalized seed landscape. It used to be that getting early revenue was the most challenging part in seed-stage, so raising capital in seed was also tricky. This execution chasm separated the wheat from the chaff.  

Without these guard rails and market sizing being so abstract in the early stage, I am left to pontificate about the type of seed deals in which I want to invest. To me, it comes down to founder and focus.

Founders need to have three traits:

High moral integrity: Believe it or not, I have overlooked this in making decisions to get into what I thought at the time were "great valuations." The result was not great by any means. I've learned that I need to stay acutely attuned to what a founder says leading up to investment. Do numbers change? Do agreements go soft? Are they looking out for their investors currently on their cap table?

Alignment of interests:  Are they aligned with the DWP Capital's investment thesis? I need to ensure they are okay with optionality and not binary outcomes. This piece is identified when speaking about their grand vision for the company.

Appreciation for numbers:  Do they understand the gross margin of their product or service? Do they know their competitors' pricing and understand sensitivities around what is going to happen when they start achieving market share.  

All of these categories are measured on a scale.  

I am a big believer in vertical SaaS. This is because it forces founders to get super intentional about product-market fit and go-to-market fit. Horizontal plays generally have tremendous outcomes, but I would rather stay "in the pockets from a risk-adjusted basis."